ANStek (3528)

President: Mark Lee 1H 2017

1

Disclaimer • The following pages contain projections & estimates of

financial information as well as the market and product developments for the future periods. These projections & estimates are based on information currently available which we believe to be reliable, but they involve risks and uncertainties.

• Our actual results of operations and financial conditions may differ significantly from those contained in the projections & estimates. These projections & estimates should not be interpreted as legally binding commitments, but rather as flexible information subject to change occasionally.

Contents

• Business Overview 1

• Core Competitiveness 2

• Operation Results 3

• Future Prospects 4

Primary Product Lines

End Products and Applications

Major Clients

Business Overview

Company Profile

Company Name:

Answer Technology Co., Ltd.

Established Date:

Dec.26,2000

President: Mark Lee

Paid in Capital:

NT$637,677,900

Staffs: 145 people

Address: Website:

21F., No.75, Sec.1 Xintai 5th Rd., Xizhi Dist. 221, New Taipei City, Taiwan, R.O.C. http://www.anstek.com.tw

PM 7%

FAE 25%

Sales Engineers

48%

Administrators 20%

STAFF PORTIONS(%)

Primary Product Lines

11

ADI high-performance analog components are very competitive

with various applications

Xilinx programmable logic array (FPGA)

migrates to 7-9 nm process

Finisar breakthrough optical technology

leads the communication

Industry

Valens is the first initiator of the global HDBaseT Alliance in

Israel

Global

No.1 Global

No.1

Global

No.1

Major Products

Global

No.1

Major Products Categories

Analog Components

Hi End FPGA

Multimedia Transmission

Internet Interface

Focus on the industrial control industry and establish the leading position in the market

Major Products Applications

Industrial PC (IPC) 26%

Defense/Aerospace 12%

Mutimedia 11%

Industrial Control/ Automation

24%

ATE 23%

Others 4%

Major Clients

Core Competitiveness

Focus on Industrial Products

Peers Differentiation

Demand Creation Ability

Applications

Over 120 Applications

Numerous

More than 3,000 items with Great

Management

Sustain

Gross Margin More than

Double than the Peers

Tailor Made

Wide Client base, more than 1,500 customers

Essential

Long Product Cycle with Low

Substitution

Knowledge

FAE accounts for 25% of the Total

Staffs

-Focus on Industrial Control -Provide Integrated Solutions and Differentiated Services

Focus on Industrial Products

Peers Differentiation

ANStek General IC Distributors

1. Technical Service Industrial Control Original reference design with

common usages

2. Market/Applications Industrial, Automation, Instruments

PC, NB, Mobile, Consumer, Memory

3. Product Cycle Slow Fast

4. Staff Training 1-3 Years < 6 Months

5. FAE / Sales(%) High Low

6. Client Relationship Long Term Price Related

7. Analog + Digital (%) High Low

PM 7%

FAE 25%

Sales Engineers

48%

Administrators 20%

STAFF PORTIONS(%)

Demand Creation Ability

●Develop more than 150 Projects per month, each contains 200 ~ 300 components ●New Clients in 2013, 2014, 2015: 381, 342, 334 each year ●Has won “ADI Taiwan Best Agents Awards” several times -New clients portions: ADI Global- 3%, ANStek- 7% -1,237 New Projects of ADI in 2015 with 3,647 components. Total 1,067 products lead in Mass Production, achievement rate of 29.3%

Demand Creation Achievements Prospecting New Clients

Seeking new product applications from the broad customer base

Looking for the potential customers and recommend the appropriate products, materials and parts from various shows & exhibitions

Searching for new customers from the product applications

Demand Creation Example

Product : ATCA(Advanced Telecom Computing Architecture) Application: Network packet inspection and analysis of data transmission security In response to the future of end-user applications that require a wide range of adjustments, programmable logic element is necessary. FPGA high-end products design beyond the application limitations that Broadcom has dominated, especially in Network/ Telecom market

Xilinx: The main function of FPGA is communications network packet analysis and multi-channel 100G data stream. The product needs to integrate a number of Netcom agreements with Xilinx IP, its technical threshold is more difficult compared to ASSP. Aggregated IP data tables and Xilinx IC design documents, focusing on important features and interface modules required for the initial verification. To avoid the high-cost system risks for the Xilinx IC customers, and to ensure that every aspect of the design may hinder and technical support resources to achieve, it is important to assess from the reference design, developments of the circuits and the corresponding boards, etc… Because of high-speed and large amount transmission of the 10Gb channel switch, the initial hardware design and simulation need the rigorous design and planning. Xilinx uses the latest manufacturing process IC, so the original message associated with customer design guide synchronize with the communication.

Xilinx

FPGA

Device

PMM-XL1

Connector MUX

CLK Generator

IDT8T49N028I

PMM-XL0

Connector

MUX JTAG Flash

USB To JTAG

F1223H

Debug

LDE

PMM1

Connector

PMM0

Connector Debug

Switch LED BUs

FRU I2C

LED BUs

FRU I2C

QSPI

Switch

Board

I2C MDIO

SERDESx12

I2C MDIO

SERDESx12

SERDESx12

I2C MDIO

SERDESx12 MDIO I2C

PCIe G2x1

Operation Results

Operation Results

Dividend Policy within 6 Years

(NT $ mn) 2011 2012 2013 2014 2015 2016 1H 2017

Total Revenue

2,847 2,623 2,545 3,190 3,255 3,100 1,834

Gross Profit 370 360 368 460 498 426 240

Operation Expenses

196 205 209 248 259 249 137

Operation Income

174 155 159 212 239 177 102

Non-Op Income

(1) 17 19 0 (4) 25 10

Pre-Tax Profit 173 172 178 212 235 202 112

Net Income 136 143 146 175 193 166 92

EPS (NT$ )

3.3 2.85 2.79 3.19 3.35 2.64 1.45

Financial Statement

Focus on Industrial Products & Gross Margin Steady Growth

0

500

1000

1500

2000

2500

3000

3500

2011 2012 2013 2014 2015 2016 1H 2017

Sales

Margin

Net Income

Unit: NT$ mn

Dividend Allotments Maintain above 75% for the last 6 Years

Cash Dividend

1.8 1.8 2.0 2.2 2.3 2.4

Stock Dividend

0.8 0.5 0.3 0.3 0.2 0.1

2011 2012 2013 2014 2015 2016

EPS 3.3 2.85 2.79 3.19 3.35 2.64

Dividend 2.60 2.30 2.30 2.50 2.50 2.50

0

0.5

1

1.5

2

2.5

3

3.5

4

Unit: NT$

Future Prospects

New Opportunities for Industrial Products

Business Development Program

Source: German Research Center for Artificial Intelligence

Industry 4.0 Development Process New Opportunities for Industrial Products

Smart Meter

Factory Automation

Cloud Server

Industrial PC

Wireless Comm.

Micro Comm.

Industrial PC

Medical Instruments

Security Monitoring

Core Technology of Smart Factory

ANStek 2017 Progress in Industry 4.0

ADI industrial networking system modules with ultra-low- power technology integrate RF amplifiers, AC/DC converters and few sensors

High-end Xilinx FPGA chips migrate to advanced 9 nm and 7 nm process and further obtain the big-data analysis, AI, High Speed Cloud Computing and other high end integrated applications markets

ADI and Xilinx are also the 2 major product lines of ANStek in Defense & Aerospace applications. It helps to improve the overall gross profit due to its gross margin is higher than the industrial application

The new product lines synergy

PCI-E USB3.0/3.1 Switch

新代理線 ASMedia will expand PCI-E product line into GEN 3 area

Extending from PCI-E to USB3.0 / 3.1 high transmission product lines

ANStek is the major agent of ASMedia in the Industrial area, the main clients including domestic industrial PCs and automation equipment manufacturers

ASMedia and ANStek will cooperate to develop the network transmission and cloud storage products in the future

The new product lines synergy

新代理線 Finisar provides the total solution of fiber optic communication network products Leading Edge 400G, 200G and 100G optical fiber modules

ANStek is the major distributor of Finisar in Taiwan, customers include cloud servers, network communications and industrial computer companies

ANStek and Finisar cooperate to promote the new generation high speed optical fiber modules

Defense, Aerospace

Auto

Industry, Instruments

Product Develop Program

1.Industry & Instruments IC Testing Equipment Factory Automation Industrial PC Medical Instruments

2.Communication Cloud Storage Fiber Communication 4G/5G Mobile Communication

3.Automotive Microwave distance measuring device ADAS system Telematics Vehicle entertainment

4.Defense/Aerospace Radar communication system Satellite communication (GPS, video) Drone

Communication

• GAS Sensor

• Microcontroller

• Memory

• Wireless

Future

Communication

Auto

Defense/ Aerospace

Industry, Instruments

GAS Sensor

Microcontroller

Memory

Wireless

The End

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